OECD chief: Anti-trade forces have upper hand on TPP

WASHINGTON, June 17, 2016 – When it comes to rallying public sentiment, anti-trade forces will always have the advantage over those who support massive trade deals like the Trans-Pacific Partnership, according to Angel Gurria, secretary-general of the Organization for Economic Cooperation and Development.

“It is easier to attack free trade than it is to defend it,” Gurria said Friday at a forum sponsored by the Washington International Trade Association.

Far more people benefit from free trade deals than are harmed, Gurria argued, but he said that’s a difficult argument to make. The damage, such as idled manufacturing plants, is much more visceral and the impact is much more immediate that the quieter benefits to the “silent majority.”

“The benefits of open markets tend to be longer-term and more diffuse,” said Gurria, who’s led OECD for the past 10 years. “An unemployed steelworker does not take much comfort from knowing that programmers in Silicon Valley are thriving or that T-shirts and cell phones are cheaper.”

The TPP has been a soft target for Republican and Democratic presidential candidates because it’s easy to point at closed factories or companies that have moved overseas and say they are evidence that trade deals are bad.

Gurria, an economist and former finance and foreign affairs minister in Mexico, said people need to be more vocal about the wide-ranging benefits of trade deals. But he acknowledged it is not always easy to change minds.

The U.S. agricultural sector would likely agree. Most farm groups and agriculture industry representatives have been offering vocal support for the TPP since before the negotiations on the 12-nation trade deal concluded, but it has been an uphill battle to persuade lawmakers in Congress to approve the agreement.

The American Farm Bureau Federation came out recently with a study showing TPP would raise net farm income by $4.4 billion annually thanks to steep reduction in tariffs and the removal of sanitary and phytosanitary barriers. And an International Trade Commission report released in May concluded that a successful TPP would boost agricultural exports would rise by about $7.2 billion per year by 2032.

Losing the fight on TPP or on other efforts to increase international trade, such as the Transatlantic Trade and Investment Partnership (T-TIP) with the European Union, would be dangerous, Gurria said.

When the public and lawmakers listen to the loudest voices – often the voices against trade deals – that can lead to protectionist policies and trade barriers that hurt economies.

“Above all, we must turn the tide of skepticism about the benefits of trade,” he said. “This is not an issue in which we should allow the discussion to go uninformed or for people to use their intuition.”

Still, advocates of free cannot ignore that these massive international trade agreements can have adverse effects, said Ken Ash, OECD trade and agriculture director, said during a roundtable discussion after Gurria’s speech. He said governments and trade negotiators need to do a better job of preparing factory workers for possible transition to new occupations.

This week’s guest on Open Mic is Ken Dallmier, President and COO of Clarkson Grain Company. While the global grain business is dominated by supply, demand and now trade wars, this Illinois-based company functions under a customer-focused mindset. Dallmier says this generation of consumer demand is dominated by a different set of social values leading to questions over the way food is produced and the prices they’re willing to pay. Sustainability, organic and non-GMO are providing farmers an income stream isolated from traditional market forces.

Department of Transportation Secretary Elaine Chao and Environmental Protection Agency Acting Administrator of the Andrew Wheeler recently announced their intent to reassess and correct the Corporate Average Fuel Economy standards.

The world of agriculture extends beyond what’s growing in your field or living in your barn, and here at Agri-Pulse, we understand that. We make it our duty to inform you of the most up-to-date agricultural and rural policy decisions being made in Washington D.C. and examine how they will affect you – the farmer, the lobbyist, the government employee, the educator, the consultant and the concerned citizen.